‫ششمني کنفرانس بنياملللي مديريت فناوري اطالعات و ارتباطات‬

WWW.ICTM.IR

Benefits and Pitfalls of Virtual R&D Teams: An Empirical Study

Nader Ale Ebrahim*, Shamsuddin Ahmed, Zahari Taha

Department of Engineering Design and Manufacture, Faculty of Engineering, University of Malaya
Kuala Lumpur, Malaysia
*
e-mail: aleebrahim@perdana.um.edu.my

Abstract
In this paper, advantages and drawbacks of virtual teams in research and development (R&D) are studied. With the
globalization of commercial practices and advances in information and communication technologies, increasing
numbers of enterprises are establishing cross-functional, geographically distributed virtual teams. Virtual teams in
R&D are designed to access external resources and knowledge to maximize the competitive advantage from limited
labor and resources. A survey has been conducted on 210 Malaysian and Iranian manufacturing companies, aimed to
investigate the characteristics of R&D collaborations and extract the main advantages/disadvantages’ factors of
virtual teams. These factors can be a guide line for R&D manager to achieve better performance of virtual teams.

Keywords
Virtual teams, Research and Developments, Survey finding

geographic and other boundaries. Moreover, virtual

1. INTRODUCTION
An increasing number of companies, especially those with
knowledge-intensive research and development (R&D)
programs, have turned to virtual teams in recent years to
generate the greatest competitive advantage from limited
labor and resources [1]. The bulk of our understanding of
teams is based on traditional teams in which all members
are collocated and communicate face to face. However,
geographically distributed teams, whose members are not
collocated and must often communicate via technology,
are growing in prevalence [2]. Meet the technological
needs of industry and boost entity international
competitiveness, companies should rely on operates a
virtual teams R&D. These needs are fundamentally linked
with the flow of information, assignment of competency,
and transfer of authority in international R&D
organization, and are central for international technology
and knowledge transfer between dispersed R&D sites [3].
The mega trends like globalization and high demand
fluctuation force companies and supply chains to innovate
new business models to gain and maintain in a
competitive position. Networking, outsourcing, and
information and communication technology is considered
as general tools and means to respond to these challenges
[4]. As consequence multinational corporations (MNCs)
have increased their research and development (R&D)
investment in foreign countries [5].
Virtual teams are important mechanisms for
organizations seeking to leverage scarce resources across
collaboration has become vital for most organizations.
This is particularly true in the context of R&D activities.
Such collaboration often involves a network of partners
located around the world. However, at the R&D project
level, dealing with such distributed teams challenged both
managers and specialists. They should be aware of
advantages and pitfalls of virtual teams in R&D. The
decision to use a virtual team is often a necessity and not
a choice; being ‗virtual‘ is in most cases not a strategy but
an operational reality [6]. Virtual teams reduce time-to-
market and based on some evidence collaboration
between geographically distributed teams sites yield some
mutual benefits in terms of better quality and reduced
costs between 20 to 50 percent for a new product [7].
Despite numerous studies on the topic in recent years,
there still appears the need to a vision what virtual teams
in R&D are and how it can impact the competitive
advantage of enterprises.
In this paper, the following aspects, comprehensive
definition of virtual teams, benefits and pitfalls of virtual
teams, research method, data collection, data Analysis,
discussions and finally Conclusion are covered. Details of
pertinent practical guidelines and implications for R&D
managers are also derived.
2. DEFINITION OF VIRTUAL TEAMS
Literature related to virtual teams revealed a lack of depth
in the definitions. Although virtual teamwork is a current
topic in the literature on global organizations, it has been
 ‫ششمني کنفرانس بنياملللي مديريت فناوري اطالعات و ارتباطات‬
WWW.ICTM.IR
problematic to define what ‗virtual teams‘ means across
multiple institutional contexts [8]. The concept of a
―team‖ is described as a small number of people with
complementary skills who are equally committed to
common purpose, goals, and working approach for which
they hold themselves mutually accountable [9]. It is worth
mentioning that virtual teams are often formed to
overcome geographical or temporal separations [10].
Virtual teams work across boundaries of time and space
by utilizing modern computer-driven technologies. The
term ―virtual teams‖ are used to cover a wide range of
activities and forms of technology-supported working
[11]. Gassmann and Von Zedtwitz [6] defined ―virtual
team as a group of people and sub-teams who interact
through interdependent tasks guided by common purpose
and work across links strengthened by information,
communication, and transport technologies.‖ Another
definition suggests that virtual teams, are distributed work
teams whose members are geographically dispersed and
coordinate their work predominantly with electronic
information and communication technologies (e-mail,
video-conferencing, telephone, etc.) [12]. From the
perspective of Leenders et al. [13] virtual teams are
groups of individuals collaborating in the execution of a
specific project while geographically and often temporally
distributed, possibly anywhere within (and beyond) their
parent organization. So we define virtual teams as: small
temporary groups of geographically, organizationally
and/or time dispersed knowledge workers who coordinate
their work, predominantly with electronic information and
communication technologies in order to accomplish one
or more organization tasks [14, 15].
3. BENEFITS AND PITFALLS OF VIRTUAL TEAM
Working in today‘s business world is like working in a
world where the sun never sets. During the last decade,
words such as ―virtual‖, ―virtualization‖, ―virtualized‖
have been very often advocated by scholars and
practitioners [16]. However, the advantages and pitfalls of
virtual teams are concealed. The availability of a flexible
and configurable base infrastructure is one of the main
advantages of virtual teams. Virtual R&D teams often
face tight schedules and a need to start quickly and
perform instantly [17]. Virtual team may allow people to
collaborate more productivity at a distance [18]. As a
drawback, virtual teams are particularly weak to mistrust,
communication break downs, conflicts, and power
struggles [19]. On the other hand, virtual teams reduce
time-to-market [7]. Lead Time or Time to market has
been generally admitted to be one of the most important
keys for success in manufacturing companies [20].
Clearly the rise of network technologies has made the use
of virtual teams feasible [21]. Many managers are
uncomfortable with the concept of a virtual team because
successful management of virtual teams may require new
methods of supervision [22]. We provide a
comprehensive point of view on virtual teams for such
managers.
Forming and performing in virtual teams is useful for
projects that require cross-functional or cross boundary
skilled inputs and the key to their value creation is to have
a defined strategy in place to overcome the issues
highlighted, especially the time zones and cultural issues.
While communication could be seen as a traditional team
issue, the problem is magnified by distance, cultural
diversity and language or accent difficulties. For
migration or similar large-scale projects, personal project
management competency, appropriate use of technology
and networking ability, willingness for self-management,
cultural and interpersonal awareness is fundamentals of a
successful virtual team [23].Thomas and Bostrom [24]
found that a technology facilitator role can be critically
important to virtual team success.
4. RESEARCH METHOD
A survey was developed to collect the data. A likert scale
from 1 to 5 was used. This set up gave respondents a
series of attitude dimensions. For each dimension, the
respondent was asked whether, and how strongly, they
agree or disagree to each dimension using a point rating
scale. First the survey was tested in a small group and
then modified and improve reliability for large samples.
Participants were directed to a website and the survey was
completed on-line. The rapid expansion of Internet users
has given web-based surveys the potential to become a
powerful tool in survey research [25]. Denscombe [26]
findings encourage social researchers to use web-based
questionnaires with confidence and the data produced by
web-based questionnaires is equivalent to that produced
by paper-based questionnaires. Other authors emphasized
that the data provided by Internet methods are of at least
as good quality as those provided by traditional paper-
and-pencil methods [27, 28]. However minor differences
occur between the two survey methods; online
respondents provide more improvement suggestions [28]
and tended to be slightly longer than those from the paper
version, the differences are not statistically significant
[29].
An online questionnaire was designed base on main
advantages and disadvantages of virtual teams. 21 and 6
questions derived from literature review regarding
benefits and pitfalls of virtual teams respectively. To help
disentangle the concepts of virtual teams in R&D, 27
individual criteria asked from respondents (Table 1).
These criterions have been grouped together through
factor analysis to form the main advantages and
disadvantages factors of virtual teams in R&D. The
respondent asked a series of questions such as BEN1:
 ‫ششمني کنفرانس بنياملللي مديريت فناوري اطالعات و ارتباطات‬
WWW.ICTM.IR

―How much did you benefit from using virtual teams on Table 2 Six criteria of the virtual teams' pitfalls
the scale of 1 to five (one being no benefit and 5 being the
Question Criteria Question Criteria
most benefit): Reduce time to market?―. The same Challenges of
procedures have implemented on the 6 disadvantages Developing trust
determining the
DIS1 DIS4 among the members
(DIS) factors of virtual teams (Table 2). appropriate task
are challenging
technology fit
Cultural and
Decreases
functional diversity
5. DATA COLLECTION DIS2 monitoring and DIS5
caused low efficiency
control of activities
A total of 210 surveys were completed. However, after of team
data cleansing procedures were applied, 125 surveys were Challenges of
DIS3 DIS6 Hidden cost is high
managing conflict
available for analysis. Data cleansing has done according
to usage of virtual teams in the firm. All respondents were
The main sampling target was managing director,
asked to complete a web based questionnaire describing
R&D manager, a new product development manager,
their organization, current position and their experiences
project and design manager and appropriate person who
with virtual teams. With Likert five scales measuring
were most familiar with the R&D activities in the firm.
individual opinion about virtual teams‘ benefits and
For better understanding the questionnaire has been
pitfalls in the questionnaire. Participants included
prepared into different languages English and Persian.
individuals working on a variety of manufacturing
The Iranian respondents could select either English
companies. Industries included Automotive/vehicle and
version or Persian version of the questionnaire. 963
components 40%, Electronic products and components
emails have sent to relevant manufacturing companies and
15%, Home appliances 8%, Fabricated metal products
requested them clicked the hyperlink of online web page
and Electrical machinery , 5% each , and Paper products,
and answer the questionnaire. Out of 963 respondents 210
Chemical products ,Industrial equipment ,almost has the
manufacturing companies responded completely and the
same share in the rest portion.
rest answered partially. Only 125 firms were met the
criteria of this research so the rest of responded deducted
Table 1 21 Criteria of The Virtual Teams Benefits from data analysis.

Question Criteria Question Criteria

BEN1
Reduce time to
BEN12 More effective R&D
6. DATA ANALYSIS AND DISCUSSIONS
market
Increase team Using the best talent In the case of reliability analysis, Cronbach‘s Alpha [30]
BEN2 BEN13 was employed to measure internal consistency of the 21
flexibility regardless of location
BEN3 Reduce design time BEN14 Greater productivity advantages factors of virtual teams. A reliability test was
Producing better carried out to ensure that the research finding have the
shorter development
BEN4
times
BEN15 outcomes and attract ability to provide consistence results. Cronbach‘s alpha
better employees for the 21 advantages factors were found within
Provide organizations acceptable limits and to be 0.950, which means there was
BEN5 Cost saving BEN16 with unprecedented
level of flexibility a high reliability for designed questions. An exploratory
Response quickly to factor analysis was conducted on 21 advantages factors of
Better operational
BEN6
efficiency
BEN17 changing business virtual teams. Using a Principle Component Analysis with
environments a Varimax Rotation and an Eigenvalue of 1 as the cut-off
Better quantity Sharing knowledge,
BEN7
information
BEN18
experiences
point [31] and an absolute value of a factor loading
Increase coordination Cultivating and greater than 0.5 [32]. The 21 factors were grouped into
BEN8 BEN19
between departments managing creativity four, which had an Eigenvalue greater than one.
Provide a vehicle for Furthermore, an exploratory factor analysis was
Increase coordination
global collaboration conducted on six disadvantages factors of virtual teams.
BEN9 with suppliers/ BEN20
and coordination of
customers Only one component extracted, which mean all of six
R&D related activities
Reducing relocation Facilitate knowledge criteria have the same level of priority in R&D
BEN10 BEN21
time capture department of manufacturing companies.
BEN11 Reduce travel costs The authors attempted to identify and named the
confirmed factors based on the principle of being concise
without losing clarity of meaning. After extracting the
factors, Variables with higher loadings are considered
more important and have greater influence on the name of
 ‫ششمني کنفرانس بنياملللي مديريت فناوري اطالعات و ارتباطات‬
WWW.ICTM.IR
selected reduced factors. The names and contents of four
derived factors are:
 Factor 1: It consists of ―Better operational
efficiency‖, ―Better quantity information‖,
―Greater productivity‖, ―Sharing knowledge,
experiences‖, ―Provide organizations with
unprecedented level of flexibility‖ and
―Producing better outcomes and attract better
employees‖ is named ―Better Output‖.
 Factor 2: It consists of ―Reduce time to market‖,
―Reduce travel costs‖, ―Reduce design time‖,
―shorter development times‖, ―Cost saving‖,
―Reducing relocation time‖ and ―Increase team
flexibility‖. Due to the fact that BEN4 has been
higher loading (0.762) the factor is named
―Reduce R&D time‖.
 Factor 3: It consists of ―More effective R&D‖,
―Using the best talent regardless of location‖,
―Response quickly to changing business
environments‘, ―Facilitate knowledge capture‖,
―Provide a vehicle for global collaboration and
coordination of R&D related activities‖ and
―Cultivating and managing creativity‖ is named
―More effective R&D‖.
 Factor 4: It consists of ―Increase coordination
between departments‖ and ―Increase coordination
with suppliers/ customers‖ is named ―Increase
coordination‖.
All above mentioned factors are summarized in Figure
1. This new model is based on data analysis of survey
findings. The model provides an overview of virtual team
advantages in manufacturing firms R&D of selected
developing countries. Although more than 59 percent of
respondents are working in manufacturing firms R&D on
virtual teams bases but virtual team application in
manufacturing companies is still in infancy.
Figure 1. Model of main factors of virtual team advantages in
manufacturing firms R&D (based on research results).
7. CONCLUSION
Factor Analysis provides direct insight into the
interrelationships between 21 variables and reduced to
four components. First factor which is consists of ―Better
operational efficiency‖, ―Better quantity information‖,
―Greater productivity‖, ―Sharing knowledge,
experiences‖, ―Provide organizations with unprecedented
level of flexibility‖ and ―Producing better outcomes and
attract better employees‖, is more important than the rest
three factors. So if managers of firms in developing
countries looking for ―better teams out put‖ they should
employ virtual teams in R&D.
Despite the enormous benefaction of employ virtual
teams in R&D department of manufacturing companies
and virtual publicity, the application of virtual teams by
most enterprises, is still at its infancy. While reviewing
the previous study has believed and survey results are
shown, we can conclude that the advantages of working
based on virtual teams far outweigh the disadvantages.
Virtual teams bring about better team output, reduce time-
to-market, reduced travel costs, ability to tap selectively
into a center of excellence, using the best talent regardless
of location, greater degree of freedom to individuals,
shorter development times, respond quickly to changing
business environments, and finally higher team
effectiveness and coordination. Therefore, the decision on
setting up virtual teams is not a choice but a necessity. On
the other hand, the manager of a virtual team should be
aware of pitfalls of such a team which mostly vulnerable
to mistrust, challenges of managing conflict, and
decreases monitoring and control of activities.
This study is probably the first to present an empirical
study on virtual teams in R&D in selected developing
countries. The future research needs to investigate the
model and verify it by a larger sample from different
sectors since this study was limited to manufacturing
sector. In a larger sample, it is possible to compare the
results between different countries.
REFERENCES
[1] T. Y. Chen, Y. M. Chen, and H. C. Ch, "Developing a
trust evaluation method between co-workers in virtual
project team for enabling resource sharing and
collaboration," Computers in Industry vol. 59, pp. 565-
579, 2008.
[2] P. J. Hinds and D. E. Bailey, "Out of Sight, Out of
Sync: Understanding Conflict in Distributed Teams,"
Organization Science, vol. 14, pp. 615-632, 2003.
[3] M. von Zedtwitz, O. Gassmann, and R. Boutellier,
"Organizing global R&D: challenges and dilemmas,"
Journal of International Management, vol. 10, pp. 21-49,
2004.
[4] E. Salmela and A. Lukka, "Value added logistics in
supply and demand chains SMILE. Part 1 : Ebusiness
between global company and its local SME supplier
 ‫ششمني کنفرانس بنياملللي مديريت فناوري اطالعات و ارتباطات‬
WWW.ICTM.IR
network,Research Report 153, ISBN 951-764-925-8,"
2004.
[5] G. Reger, "Coordinating globally dispersed research
centers of excellence—the case of Philips Electronics,"
Journal of International Management, vol. 10, pp. 51–
76, 2004.
[6] O. Gassmann and M. Von Zedtwitz, "Trends and
determinants of managing virtual R&D teams," R&D
Management vol. 33, pp. 243-262, 2003.
[7] A. May and C. Carter, "A case study of virtual team
working in the European automotive industry,"
International Journal of Industrial Ergonomics, vol. 27,
pp. 171-186, 2001.
[8] K. M. Chudoba, E. Wynn, M. Lu, Watson-Manheim,
and M. Beth, "How virtual are we? Measuring virtuality
and understanding its impact in a global organization,"
Information Systems Journal, vol. 15, pp. 279-306, 2005.
[9] M. M. N. Zenun, G. Loureiro, and C. S. Araujo, "The
Effects of Teams‘ Co-location on Project Performance,"
in Complex Systems Concurrent Engineering-
Collaboration, Technology Innovation and Sustainability,
G. Loureiro and R. Curran, Eds. London: Springer, 2007,
pp. 717-726.
[10] W. F. Cascio and S. Shurygailo, "E-Leadership and
Virtual Teams," Organizational Dynamics, vol. 31, pp.
362-376, 2003.
[11] A. H. Anderson, R. McEwan, J. Bal, and J. Carletta,
"Virtual team meetings: An analysis of communication
and context," Computers in Human Behavior, vol. 23, pp.
2558–2580, 2007.
[12] G. T. Hertel, S. Geister, and U. Konradt, "Managing
virtual teams: A review of current empirical research,"
Human Resource Management Review, vol. 15, pp. 69–
95, 2005.
[13] R. T. A. J. Leenders, J. M. L. V. Engelen, and J.
Kratzer, "Virtuality, communication, and new product
team creativity: a social network perspective," Journal of
Engineering and Technology Management, vol. 20, pp.
69–92, 2003.
[14] N. Ale Ebrahim, S. Ahmed, and Z. Taha, "Virtual
Teams: a Literature Review," Australian Journal of Basic
and Applied Sciences, vol. 3, pp. 2653-2669, 2009.
[15] N. Ale Ebrahim, S. Ahmed, and Z. Taha, "Virtual R
& D teams in small and medium enterprises: A literature
review," Scientific Research and Essay, vol. 4, pp. 1575–
1590, December, 2009 2009.
[16] A. Vaccaro, F. Veloso, and S. Brusoni, "The Impact
of Virtual Technologies on Organizational Knowledge
Creation: An Empirical Study," in Hawaii International
Conference on System Sciences: Proceedings of the 41st
Annual Publication 2008, pp. 352-352.
[17] B. E. Munkvold and I. Zigurs, "Process and
technology challenges in swift-starting virtual teams,"
Information & Management, vol. 44, pp. 287–299, 2007.
[18] O. Gassmann and M. Von Zedtwitz, Innovation
Processes in Transnational Corporations: Elsevier
Science Ltd, 2003.
[19] B. Rosen, S. Furst, and R. Blackburn, "Overcoming
Barriers to Knowledge Sharing in Virtual Teams,"
Organizational Dynamics, vol. 36, pp. 259–273, 2007.
[20] M. Sorli, D. Stokic, A. Gorostiza, and A. Campos,
"Managing product/process knowledge in the
concurrent/simultaneous enterprise environment,"
Robotics and Computer-Integrated Manufacturing, vol.
22, pp. 399–408, 2006.
[21] P. M. Beranek and B. Martz, "Making virtual teams
more effective: improving relational links," Team
Performance Management, vol. 11, pp. 200-213, 2005.
[22] S. L. Jarvenpaa and D. E. Leidner, "Communication
and Trust in Global Virtual Teams," Organization
Science vol. 10, pp. 791 - 815 1999.
[23] L. Lee-Kelley and T. Sankey, "Global virtual teams
for value creation and project success: A case study,"
International Journal of Project Management vol. 26, pp.
51–62, 2008.
[24] D. M. Thomas and R. P. Bostrom, "Virtual Team
Leader as Technology Facilitator: the missing role," in
Proceedings of the 2005 Southern Association for
Information Systems Conference, 2005, pp. 35-40.
[25] S. J. Sills and C. Song, "Innovations in Survey
Research: An Application of Web-Based Surveys,"
Social Science Computer Review, vol. 20, pp. 22-30,
February 1, 2002 2002.
[26] M. Denscombe, "Web-Based Questionnaires and the
Mode Effect: An Evaluation Based on Completion Rates
and Data Contents of Near-Identical Questionnaires
Delivered in Different Modes," Social Science Computer
Review, vol. 24, pp. 246-254, May 1, 2006 2006.
[27] S. D. Gosling, S. Vazire, S. Srivastava, and O. P.
John, "Should We Trust Web-Based Studies? A
Comparative Analysis of Six Preconceptions About
Internet Questionnaires," American Psychologist, vol. 59,
pp. 93-104, 2004.
[28] E. Deutskens, K. de Ruyter, and M. Wetzels, "An
assessment of equivalence between online and mail
surveys in service research," Journal of Service
Research, vol. 8, pp. 346-355, May 2006.
[29] M. Denscombe, "The Length of Responses to Open-
Ended Questions: A Comparison of Online and Paper
Questionnaires in Terms of a Mode Effect," Social
Science Computer Review, vol. 26, pp. 359-368, August
1, 2008 2008.
[30] L. Cronbach, "Coefficient alpha and the internal
structure of tests," Psychometrika, vol. 16, pp. 297-334,
1951.
[31] A. E. Akgün, M. Dayan, and A. D. Benedetto, "New
product development team intelligence: Antecedents and
consequences " Information & Management vol. 45, pp.
221-226, 2008.
[32] M. Fathian, P. Akhavan, and M. Hoorali, "E-
readiness assessment of non-profit ICT SMEs in a
developing country: The case of Iran," Technovation, vol.
28, pp. 578-590, 2008.